from washington, the mclaughlin group, the american original. for over three decades, the sharpest minds, best sources, hardest talk. >> the mclaughlin group is brought to you in part by american petroleum institute. on new years day, and during the first week of january, the u.s. economy will be hit by $600 billion of automatic tax increases. and automatic spending cuts. the phenomenon known as the fiscal cliff. if that happens, it will trigger a recession, or worse.

so, president obama is taking action and insisting that republicans agree to increase the existing marginal tax rates on the wealthiest top 2% of u.s. taxpayers. and of course, there is more to the deal. but there will be no negotiations on that big part of the deal unless that tax on the wealthiest 2% is negotiated now. the president could not be more emphatic in stressing the indispensable element of surmounting the cliff is that super-rich revenue. >> we're not insisting on rates just out of spite. or out of any kind of partisan bickering. but rather because we need to raise a certain amount of revenue. >> okay. here is john boehner, the republican house speaker. >> if you look at the plans that the white house have talked about thus far, they couldn't pass either house of the congress.

>> republicans proposed raising $800 billion in extra revenues. and that revenue should come through tax reform and closing loopholes. happy new year. question, patrick, looking into the crystal ball and tell us about this january 1 monetary nuclear bomb. are we going over the cliff, patrick? >> i think i believe we may not be going over the cliff. i think this week has led me to believe there are the terms of a deal, john. the $800 billion boehner offered, i'm sure he will go up a bit. he won't go to 39% on tax rates. republicans are willing to go to i think 37%. the truth is, republicans are capitulating all along the line here, john. they're more afraid of going over the cliff than obama is. and i fear that the republicans are going to re-establish their reputation as the tax collectors of the welfare state. >> has president obama's position hardened over the past few days. >> i don't know. i am just thinking how sweet it

is what pat just sate. i agreed with everything you just said. i think it is always dangerous to be complacent that there is going to be a deal, given the stakes and the hardened political line, but ever since the speaker put revenue on the table, the republicans have been breaking rank, and i think they really don't want to go down protecting the tax breaks for millionaires and billionaires. and you do see the beginnings of a deal. they will probably drag it out a bit longer, because each side wants to show their base that they're fighting very hard. but i think reasonableness may descend on washington and it is something that we should all applaud. >> ryan grim, do you think we will have reasonable connection on this? >> i don't think so. there was another meeting on thursday, and the white house made it very clear that they're not giving much. the white house feels very burned by the 2011 debt ceiling negotiations. they feel like they have the leverage. and they're leaving it up to boehner to capitulate. >> do you think that president obama feels that he has

unilateral control of the purse? >> no, but they think that they have enough leverage that they can force republicans to put the debt ceiling into any package that they eventually come up with. and if they don't, he feels like there is some other way that he can force them to deal with this issue. >> if this is a power of the purse issue and it falls on congress, not on the president, the president would be overstepping his power. because he -- does he want to have unilateral control defacto of the purse? >> no, i don't think i wants unilateral control. what he wants to do is force the republicans in the house to do what he wants. >> which means he wants control. >> well, i mean it is a political issue, okay? the republicans have their own abilities to lean back against the democrats on all of this and against obama and i suspect they will to a point. and if he pushes too far, if obama pushes it too far, then at some point this thing will blow up. what has to be done is it has to be private negotiations, not everybody talking about the red

lines in public, because that locks everybody in. it is just done in the worst possible way. >> i want to give you the key differences now between the two sides. there are four and i will read for the sake of going fast. obama wants unilateral power. that's my reading. to increase the debt ceiling and the g.o.p. says no. number two, obama wants $1.6 trillion, eleanor, in new tax, the g.o.p. says $800 billion. number three, obama wants spending cuts deferred. g.o.p. wants specific cuts agreed to now. number four, g.o.p. wants wide entitlement cuts. obama says no. i will give you another one. number five, obama wants new stimulus money, the g.o.p. says no. >> okay, which one, what do you want me to address? >> i want to know whether those are all resolvable before the new year? >> yes, this re resolvable. on the debt limit, it was a republican idea when president bush was in the power to raise the debt limit, which is to pay bills that have already been accrued,

and that the congress could override it. the congress could object. and mitch mcconnell put that bill forward on the floor this week, thinking he was going to embarrass democratic leader reed, and reed said let's go ahead and vote. it and so then mcconnell filibustered his own bill because he got afraid the democrats had the votes for it. so that's the kind of maneuvering that is going on. childish. >> yes, childish. very childish. former republican majority leader trent lott told cnn's anderson cooper how he had a working relationship with his democratic counterpart tom daschle. the two did something called compromise. a concept that facilitates law foreign in today's congress. watch. >> i had a red phone where when i picked up that phone, it rang only one place. on tom daschle's desk. and when he picked it up, i knew i was talking to tom daschle. not his staff. not my staff. sometimes he and i lead when

our conferences were not ready to move. i remember i called one time i called him, i stepped out from a conference meeting and tom you know we need to do this, i'm having problem and he said i am too, let's go, i will see you on the floor. we went up on the floor of the senate, we called the bill up and passed it by sundown. you got to do that every now and then even though you might catch a little flash from those in your conference. it is called leadership, anderson. >> just to clarify, a red phone was on republican leader trent lott's desk and a red phone was on leader tom daschle desk. when the red phone rang on daschle's desk, he knew it was lott. and when lot's phone rang, he knew it was daschle. both. and why can't both chame bevers commerce have a similar system and why are they not enacting legislation in this congress? >> i will tell you why. the last great deal, john was at andrews air force base when

george h. w. bush in 1990 broke his pledge and he agreed to raise tax breaks. and he broke faith with the republican party. he did not get the spending cuts that he was promised. and after that they lost seats in the senate in 1909 and george bush was -- 190. and the republican party is walking right down that same road today. >> it is a good deal. it was a good deal for the country. and frankly, and that's what speaker boehner is worried about. he is worried that if he makes this kind of deal, and works with nancy pelosi and works with the white house, that he could lose his speakership over. it but he has been moving in this last week, he has been removing recall trants from committee assignments. he has been exercising the powers that he should as a leader. >> president obama is not just sitting there. he has come forward asking to raise the debt ceiling. are you following that? >> yes. >> what do you think of that,

and what do you think the congress thinks of that? >> well, it has to be raised. >> that's the power of the purse. >> the power of the purse is the power to spend. congress has already authorized and appropriated all of this money. now, it wants to come back in and prevent the government from paying the debts accrued by congress itself. so there is something absurd in congress coming in behind, and saying all of am money that we appropriated, we -- this money that we appropriated, we don't want to pay for it. we want to default on the national debt. >> if he has the power to raise the debt ceiling, the defacto power to do that, is that causing a mall-balancing, a bad balancing between the executive branch and the legislative branch? >> not at all. because the congress still has the power of the purse. if they don't want to spend money, then they don't have to spend money. all this does is saying that the congress does not unilaterally default. >> raising the debt ceiling does not trespass in that area.

it is not the power of the purse. >> it is not. what they want to do is they want to extend what mcconnell gave for a year, which is that the white house can raise the debt ceiling, and then congress can disapprove it with a two- thirds vote. so if they're that upset about it, they can weigh in. >> let me give you a question here that can relate to you very well, mr. . zuckerman. >> mortimer. >> and raise tax revenue by capping tax deductions of 2% for those making over $250,000 a year. >> 2%? >> 2%. >> raise taxes. >> 2%? >> raise tax revenue by capping deductions at 2%. >> at 2% of income? >> no, no, no. that will cause a revolution. [ laughter ] >> a bad idea. >> he said it would raise 400, $500 billion over a decades assuming the deductions were still allowed. that is more than half of the g.o.p. revenue goal. >> what you want to do is put a limit on the offsets you can

have applied to your income if you're in the upper ranges of the income spectrum, okay? the top 2% is what he is talking about. there is something to that. i think whatever the program is, it seems to me we must do something about it. because otherwise if we have -- the debt ceiling is the critical issue. because if we get up there and we will get up there sometime between now and february, you could have another great collapse in terms of the confidence notice american dollar that. would be a huge, huge issue for the united states. so we must be in a position where it is not that we have authorized the spending of the money, we just don't have the money. we're running a deficit of $25 billion every week. and we don't have it. we will run right into the debt ceiling. >> this will be revisited next week. when we come back, trouble hot spots. syria and egypt.

issue two. syrian nightmare. >> i want to make it absolutely clear to assad and those under his command. the world is watching. the use of chemical weapons is and would be totally unacceptable. and if you make the tragic mistake of using these weapons, there will be consequences and you will be held accountable. >> president obama this week warned the president of syria, bashar al-assad not to use syria's chemical weapons against his own people. rebel syrians are waging an offensive against other syrians, largely assad's government forces. unnamed u.s. officials say that syria has even gone so far as to load the precursor ingredients of sarin, a deadly nerve gas, into the aerial bombs. whether this activity is to

protect the chemicals from advancing rebel forces, or for assad to actually use them against rebel forces, is not clear. as secretary of state hillary clinton points out. >> our concerns are that an increasingly desperate assad regime might turn to chemical weapons or might lose control of them to one of the many groups that are now operating within syria. >> syria automatically denies it intends to use chemical weapons against its its own peo whether rebel or nonrebel, quote. syria stresses again, for the 10th, the 100th time, that if we had such weapons, they would not be used against its people. we would people. whether suicide. we fear there is a conspiracy to provide a pretext for any subsequent interventions against syria by these countries that are increasing pressure on syria.

unquote. so sasaid syria's deputy foreig minister faisal miqdad. >> it should be noted that the rebels who are fighting the troops of assad are themselves part of the same country. >> that's right. >> so therefore the foreign minister saying we would never use them against our own brothers, now do you believe him or what do you think? >> i tend to believe the syrian foreign minister for this reason, john. if they did use these weapons, the americans would strike. if they used them. >> what do you mean by strike? >> air against themselves. >> gas -- >> we and the israelis probably got them targeted. go after them and hit them. >> easier said than done. >> it is. if you got them all and you did that and maybe they figure we're going down and start firing them. the best thing to happen is to have the russians or the guys who have real influence in there, tell these guys, do not do this, or we leave you and

everybody abandons you and you're going down. >> is it possible that the putting of this gas inside these cylinders as i understand it, that are quote-unquote bombs is a way of making the gas movable so that it can be prevented from going into the rebel's hands because they might use it? >> well, first of all, as we're assessing the deputy foreign minister's credibility, he says if we had these weapons. he denies they have these weapons. and our intelligence -- >> he didn't deny it. >> he said if we have them. i think he -- >> no, he set up an if clause. that doesn't mean he is denying it. >> all right. >> hypothetical. >> i wouldn't rest all my strategy on his credibility. i do think the syrians are sending us a message, back off, because we do have this weaponry, and i think the president is sending a message back that we can play this game, talking about bringing the patriot missiles up to the border, putting our troops along there. this is psychological warfare

right now. and the fact that the russians are backing away from their backing of assad is a very important development, which shows that there is possibly a diplomatic settlement to this. >> do you believe not only president, but mr. panetta, secretary of defense, actually is in the act saying there would be retaliation, do you believe that? and what would be the consequences of that? >> i think everybody believes that. and i think the deputy foreign minister believes it, too. which is why the key phrase there was we wouldn't commit suicide. he knows that if they use these weapons, that there would be a massive retaliation on the part of the united states. and i don't think we should undermine his credibility just because he said "if." take israel for instance, doesn't admit it has nuclear weapons. that's accepted. >> you think rather than us, nato would be interested in getting involved? >> i think pat is right that if they use those weapons, they would be completely isolated. and it would be a coalition of everyone across the globe. >> nato forces, you got the

turks there and the americans. the americans have the air power. and the israelis in the neighborhood have it, but they don't want to get involved or shouldn't get involved. but only the americans could do that, and frankly, i don't think we could blow up all of those weapons. >> you notice the migration, not the migration, yes, the migration of the secretary of state on assad? she originally said of him that he is respectable. she said something else. >> a long time ago. >> that's a long time ago. >> a long time ago, correct. but that's what she said. secondly, she said, not secondly, thirdly, i forget what she said secondly but thirdly she said he should stay with the tide of history. remember that? >> uh-huh. >> and now, she hasn't really cut him loose, because she says that there is a possibility that others might get them, and she just said that in that bite we played. you understand? >> yes, i mean -- >> so she is being somewhat nuanced about this still. not quite as outspoken as the president himself. >> no, perhaps, but i think the message is still pretty clear,

that if there is a recourse to chemical weapons, there is going to be a huge response on the part of not only the united states, but others. and the fact that the whole tenor of that war is now shifting against assad and his forces, because we are arming every one of those -- the only risk we have just a minute. the only risk we have there is a lot of opposition to is al qaeda so we're a little bit worried that there are bad alternatives. >> the thing is -- >> more turmoil. different country. egypt. >> the presidential palace in cairo is the scene of violent clashes between supporters of president mohamed morsi and his opponent. morsi has been in office since june. only four months. but he has angered opposition forces by granting himself sweeping new powers. mr. morsi is aligned with islamists like the muslim brotherhood. he has proposed a new constitution.

one with little input from one side. the secular forces that swept morsi's predecessor hose ny bu barack from power nearly two years ago. morsi says a referendum will be held december 15 on the egyptian constitution. it will be up to the egyptian sipses to vote yet or no. -- citizens to vote yes or no. but morsi opponents dismissed the move as a ploy, including his opponent, mohamed el- baradei. one of morsi's highest profile opponents and former head of the u.n.'s nuclear regulatory agency. >> we will continue to push until we get a proper develop a institution. >> what is the key question? >> i think the key question is, is morsi's presidency in nature. and you have strong forces against him. everyone is united against him. >> behind him is the muslim brotherhood. and lately there is an

indication apparently the armed forces protected him at the palace. if you get the muslim brotherhood and the armed forces behind him, he stays in power. >> there are now morsi's people. so the army is going to support him because he has put in all of his people to run the army. >> ryan? >> not all of his people and the armed forces are still somewhat aligned with the judiciary which is also packed with mubarek era people. morsi has taken them on. but seeing the reformers in the street is almost a hopeful sign. in a sense that they are assured -- having watched what happened to mubarek, i think morsi has got to be concerned. he has got to find some way to let a little air out of this balloon. but the fact that he has the military with him suggests that he has got this thing, if not nailed down, battered down. >> let's grieve over the good old days of hosni mubarak. >> i'm not grieving over that. >> and the first speech that he gave, in the first year in office, was right over in

cairo, right? >> that's right. >> ramping up the young people. >> that's right. >> we will be right back with predictions.

♪ [ orangutans vocalizing ] [ power saw buzzing ] [ fire smoldering ] [ wind howling ] ♪

visit worldwildlife.org. predictions, pat, be quit. >> detroit goes into bankruptcy before the new year. >> to avoid the fiscal cliff, we will be cut between the week between christmas and new years. >> we go over the cliff and get a deal right after new years. >> mort? >> the economy is going to be very weak despite the solution on the fiscal cliff. >> ryan is right on the cliff, by the way. i predict the u.s. afghanistan by december 31, 2013. bye-bye.